Peer Effects in Corporate Governance Practices

 

 

Speaker: Pouyan Foroughi , UNSW

 

Firms in the same networks tend to have similar corporate governance practices. However, it is difficult to disentangle peer effects, where governance practices propagate from one firm to another, from selection effects, where firms with similar governance preferences self-select into linked groups. Studying board-interlocked firms, we utilize a novel instrument based on staggered adoptions of universal demand laws across states to identify causal peer effects in firms’ decisions on CEO’s compensation, CEO duality, and antitakeover provisions. Our results thus provide support for the existence of peer effect in the adoption of anti-takeover provisions. We find that a firm’s propensity to adopt these provisions increases after other firms in the same board interlock network choose to adopt similar policies. The impact of universal demand laws on the interlocking directors’ experience in passing these provisions is a likely mechanism explaining these effects..

 

A light lunch will be provided at 1p.m. Please RSVP for catering purposes to Mala Kapahi by 12 noon on Monday, 30th July 2018.

 

Time: 12.00 – 1.00 p.m.

Venue: University of Technology, Sydney

             Building 8, Room 8.002, Dr Chau Chak Wing Building
             Dr Chau Chak Wing Building

            14 - 28 Ultimo Road, Ultimo

 

 

Enquiries: Mala Kapahi (Ph: +61 2 9514 7777)